CITY WHITTLING ITS BACKLOG OF MILLIONS BILLED IN BUILDING FEES

San Diego’s building department has made progress toward collecting millions of dollars that it billed to developers and homeowners belatedly for project-review work completed months or years ago.

In March, The Watchdog reported on the city’s Development Services Department sending out thousands of statements for complex projects after a lengthy delay, in part caused by a glitch with a citywide computer software upgrade.

The city was owed $8.3 million for about 3,000 projects at the start of the year. As of September, those totals had dropped to $6 million for 2,600 accounts, the latest figures available.

Also at the start of the year, roughly 6,700 accounts had a credit with the city and may have been due a refund upon closure. City officials say they have issued $1.3 million in refunds and are working to process 900 remaining account closures, 400 of which likely will lead to refunds.

Several customers told The Watchdog the late bills showed charges made to their accounts after their projects were finished. The bills also contained “department correction” charges, the result of city’s fixes for the computer upgrade failure.

Mission Beach resident Peter McClintock received a bill for nearly $2,500 that included charges made a year after the city signed off on his property line adjustment. Like other customers, he has been disputing the bill for months, and was recently told he will end up paying nothing.

“It’s headed in the right direction,” McClintock said. “But, man, they’re a mess over there.”

One of the account holders to pay the bill in full was former Republican presidential candidate Mitt Romney. His La Jolla home expansion project had been on hold for months when the city sent bills demanding $17,921. The Romney attorney handling the project reviewed the charges and paid the bill three months after its late April due date.

The department’s head of information technology, Jim Myers, said that aside from continuing to close the accounts, the department is also tuning its processes to ensure overdue balances get more rapidly sent to the city’s collections department. Nearly $900,000 owed to the city has already been sent to collections, which can charge interest, penalties and garnish state income tax refunds for the overdue amounts.

Another challenge the department faces in collecting the charges is finding the account holders. About 2,200 of them have not received statements, usually due to not keeping their address current with the department.

Two-thirds of the accounts owing money to the city owe $1,500 or less, Myers said. He added that some of the account holders owing money to the department in September have active projects and have already made payments to bring their accounts current.

“Based upon both our accuracy and the customer’s changing scope of work and payment history the account typically moves in and out of deficit. So, today’s 2,600 accounts might not be the same as last month,” Myers said. “This is operationally typical as there are spurts of charges as an account moves closer to a hearing and issues are worked on by both the customer and DSD.”